• Adjusted Operating Margin: 0.8% for Q4 2024, over 2 points better than 2023.
• Adjusted Operating Income: $18 million for Q4 2024.
• Revenue Initiatives: Generated $395 million in 2024, $95 million over the target.
• Completion Factor: 99% in Q4 2024.
• Revenue Growth: Unit revenue grew 3.2% year-over-year in Q4 2024.
• CASM ex Fuel Growth: 6.6% year-over-year for full year 2024.
• Total Liquidity: $3.9 billion at the end of 2024.
• CapEx Forecast for 2025: Approximately $1.4 billion.
• Fleet Plan for 2025: 24 deliveries including 20 A220s and four A321neos.

• Warning! GuruFocus has detected 5 Warning Signs with JBLU.

Release Date: January 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• JetBlue Airways Corp (NASDAQ:JBLU) achieved a positive adjusted operating margin of 0.8% in Q4 2024, over 2 points better than in 2023.
• The company launched its strategic plan, JetForward, which is fundamental to achieving sustained profitability.
• Operational improvements were noted, with on-time performance improving by 6 points and a Net Promoter Score increase of nearly 10 points.
• JetBlue Airways Corp (NASDAQ:JBLU) successfully deferred $3 billion of capital expenditures to 2030 and beyond, strengthening its liquidity position.
• The company exceeded its 2024 revenue initiative forecast by $95 million, generating $395 million in revenue for the year.

Negative Points

• JetBlue Airways Corp (NASDAQ:JBLU) was not profitable for the full year 2024, despite progress in operating margin expansion.
• The company faces ongoing challenges with Pratt & Whitney aircraft groundings, impacting operating margins by approximately 2.5 points in 2024 and expected to grow to 3 points in 2025.
• Competitive capacity pressures, particularly in Boston, are affecting revenue performance.
• CASM ex-fuel growth is expected to remain elevated in the first quarter of 2025, driven by strategic capacity reductions and maintenance timing.
• The Pratt & Whitney engine issue is expected to continue impacting operations, with aircraft on the ground rising to the mid- to high teens in 2025.

Q & A Highlights

Q: How should we think about the revenue acceleration in the first quarter compared to the full year guide? A: Martin St. George, President: The first quarter includes a 1.5-point shift due to Easter moving to the second quarter. The rest of the improvement is from the continued implementation of JetForward and the benefits from our initiatives. We're not assuming any dramatic changes in competitive capacity; it's about managing what we can control.

Q: Is Boston expected to be a RASM drag given the growth there? A: Martin St. George, President: RASM growth in Boston is less than elsewhere due to its growth. We're not back to our peak in Boston pre-NEA, and we're redeploying ASMs back into Northeast leisure markets.

Q: Should investors add $650 million to their 2025 EBIT outlook for normalized earnings? A: Joanna Geraghty, CEO: Yes, you should think of 2025 with $200 million to $300 million of EBIT, with similar amounts in 2026 and 2027, leading to $800 million to $900 million of EBIT by the end of JetForward. It's a multiyear strategy focused on long-term profitability.

Q: How does the CASM ex-fuel trend throughout the year, and what about the impact of Pratt & Whitney groundings? A: Ursula Hurley, CFO: CASM ex-fuel is elevated in Q1 due to maintenance timing and pilot wage increases. It will decrease in subsequent quarters. The Pratt & Whitney situation is fluid, but we expect to hit peak AOG in the next one to two years.

Q: Can you expand on what you're seeing in Caribbean and Latin markets? A: Martin St. George, President: International demand is strong, with Latin markets fully recovered and performing well. San Juan faces some capacity pressure, but overall, the demand profile is strong.

Q: What are your thoughts on competitive capacity in Fort Lauderdale? A: Martin St. George, President: Competitive capacity is down in Fort Lauderdale, and we're in a good environment. We're not expecting significant pullback from Spirit, and we're happy with Fort Lauderdale's performance.

Q: How are you thinking about alliances, especially overseas? A: Martin St. George, President: We have over 50 alliance partners globally, including international carriers. We're focused on growing this portfolio while negotiating potential domestic partnerships.

Q: What is the timing for the first-class product rollout? A: Martin St. George, President: The first install of first-class will be in 2026, with some CapEx in 2025 for seat design and certification. There will be no revenue benefit in 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.